Information for UC employees about 2007 health insurance rates

As the University of California enters final negotiations with its health plans on health insurance rates for the coming year, Human Resources and Benefits has issued an update on the prospects for rates in 2007.

Health insurance costs continue to rise everywhere

Health care costs throughout the country continue to rise and employers everywhere are facing double-digit health insurance increases for 2007. In California, the California Public Employees Retirement System (CalPERS), the second largest health insurance provider in the United States, experienced average premium increases of 11.9 percent. More employers are also asking employees to pay for other benefits costs, including higher co-payments and deductibles

The good news for UC employees

UC maintains its commitment to providing employees affordable access to quality health care

UC is committed to maintaining access to quality health care and to preserving a range of choices that reflect and address employees’ diverse needs. Using UC’s purchasing power as a large group, UC is able to negotiate terms that are favorable to employees, which allows UC to offer a range of benefits that continue to be among the finest in higher education.

UC continues to pay for the majority of medical plan costs

Even though health-care costs are rising significantly, UC continues to shoulder the vast majority of health insurance costs.

UC continues salary-banded premiums to help keep cost increases down for lower-paid employees

A top priority for UC is to ensure that all employees have affordable access to quality health care, especially for lower-paid employees. Recognizing that increased premiums are especially challenging for employees with modest incomes, UC is continuing its salary-band approach to help protect employees in lower salary ranges and employees with children from the impact of premium increases.

Increases for UC members less than many others, and no reductions in benefits or out-of-pocket increases

While many employers are having to reduce or eliminate benefits, and pass on to employees numerous types of cost increases, UC is not canceling any plans or raising employee costs for co-pays and deductibles. UC also will continue to provide dental and vision coverage as well as basic life and disability insurance at no cost to employees.

Better than expected funding for 2006-07 salaries and benefits

UC received some welcome news this year regarding funding for 2006-07 salaries and benefits. The budget compact that UC signed with Governor Schwarzenegger called for a 3 percent increase in funding for salaries and benefits for the 2006-07 fiscal year. However, the final state budget actually contains an increase of 4 percent for salaries and benefits.

2007 comparison of UC and CalPERS health benefits

The figures shown in the table below are for gross premiums (the total plan costs paid to the insurance carrier), not the premiums employees pay. Information about employee premiums will be available in October.